An Open Letter to Toy Retailers

February 23, 2009

Toy Industry Association, Inc. (TIA) is the not-for-profit trade
association for the producers, importers and distributors of toys and
youth entertainment products sold in North America. TIA and its
member companies are committed to assuring the safety of the nearly
three (3) billion toys that enter the marketplace each year.

As a valued customer of our industry's products and as the vital link
to consumers, it is important to us that members of the retail community
understand the current status of the toy industry’s efforts to
implement and adhere to the requirements of the Consumer Product Safety
Improvement Act of 2008 (CPSIA) so that they may make an informed
judgment about whether the products currently on their shelves are
likely to be in violation of the new standards for lead and phthalates
that became effective on February 10, 2009.

The U.S. Consumer Product Safety Commission (CPSC) has provided relief
from some provisions of the CPSIA TIA is a strong supporter of the
concepts contained within the CPSIA. The Act strengthens toy
safety standards and elevates them to the status of federal law; it also
mandates certified testing by manufacturers to prove conformance with
these standards.

Unfortunately, in the rush for adoption, the final language used by
Congress resulted in much confusion about the scope and impact of the
law and in the imposition of unrealistic effective dates and unwarranted
retroactivity. Staff at the CPSC, the agency responsible for
enforcement of the CPSIA, has done much to decipher and illuminate the
Act.

On January 30, 2009, the Commission approved a one-year stay (e.g.,
postponement) of certain testing and certification requirements for
total lead content limits and phthalate limits. The one-year
postponement for the proper testing for phthalates and lead
content is intended to provide CPSC a window to develop needed
regulatory guidance for use by manufacturers and importers in testing to
the new standards.

In addition, in early February, the CPSC announced a “Good
Faith”-based enforcement policy that it will not impose penalties
against manufacturers, importers, distributors, and retailers that make,
import, distribute, or sell toys if they have no “actual
knowledge” that a product exceeds limits, or continue
to distribute a product after being put on actual notice by CPSC
not to do so.

The February 6 announcement includes exemptions for toys with
electronic components and inaccessible parts that may exceed the 600 ppm
lead limit, and certain materials that the Commission has recognized
rarely, if ever, contain lead. Further, to the exemption for
inaccessible parts, the CPSC has announced that it will accept in good
faith “a manufacturer’s determination that a lead-containing
part on their product is inaccessible to a child and not subject to the
new lead limits”.

Draft guidance issued by the CPSC on February 12 has also helped to
clarify that a very limited range of defined toys and childcare articles
are actually subject to the phthalate requirements that went into effect
on February 10.

Thus, the CPSC has only recently begun to define testing
methodologies and has yet to accredit any parties to conduct either lead
content or phthalate testing. This means that manufacturers and
retailers have been calling upon their labs to test existing inventory
against yet-to-be-defined testing protocols.

Recently published CPSC testing protocols for phthalates also clarify
that much of the previous testing on surface coatings and component
parts done to date may have overstated problems.

While the reports we are receiving from retailers and manufacturers
is that a very small number of currently produced toys have been found
in testing to violate the new standards, particularly given the
exemptions clearly allowed by CPSC and the Act, TIA remains concerned
about removal of past produced product without adequate CPSC guidance or
rules in place .

The Toy Industry’s Record of Safety
The toy industry is working diligently to assure that the products it
produces conform to the new safety standards. But toys have
historically been among the safest consumer products in the
marketplace. Limits on lead content for surface coatings have been
in place for decades, and toy manufacturers have had no reason to
specify the use of lead in their products.

We believe that there are very few defined toys currently in the
marketplace that have accessible, mouthable components that would fail
to meet the new CPSIA requirements.

Accordingly, TIA urges retailers to be mindful of the CPSC
policy that emphasizes and encourages good faith judgments and to
make sound decisions regarding whether the inventory on your shelves
does not violate CPSIA requirements, unless specifically advised
otherwise by the Commission or suppliers.

As CPSC Commissioner Moore noted in voting for the stay of
enforcement: “If there is one message a small manufacturer should
take from the Commission’s action today it is this: If you have
been making products without receiving any safety-related complaints,
you should go on making and selling your
products.”

Hundreds of toy manufacturers have been making products without
receiving any safety-related complaints for many years: less than
1% of toy products were recalled in 2007 for lead content issues and
there were no reports of any injuries or adverse health effects from any
of the toys recalled for lead standard violations.

Because of this record of safety, retailers and parents can be
confident that the toy industry fully understands its safety
responsibility. We will continue to take all possible steps to
comply with federal toy safety laws and abide by all CPSC determinations
of safety that are based upon established, clear and comprehensive
regulations and standards.

We look forward to working with you to ensure that all toys sold in
the U.S. are safe.